eToro Group Ltd., a Social trading and investment marketplace, is the latest company set to go public with an announcement Tuesday to merge with special-purpose acquisition company FinTech Acquisition Corp. V.
As a section of the contract, FinTech V will contribute $250 million to eToro. In comparison, a further $650 million will be invested into the company via a fully committed private placement in public equity from investors ION Investment Group, Softbank Vision Fund 2, Third Point, Fidelity Management & Research, and Wellington Management. The deal will value the combined company at $10.4 billion.
Founded in 2007, eToro offers a social investment network that allows users to watch other users’ financial trading activities, copy them, and make their trades. The company provides various tools to enable traders to learn from each other, share live trading information, and leverage their collective power.
While initially founded as a stock trading platform, the company has moved heavily into the cryptocurrency space. It launched a cryptocurrency trading service in the U.S. in March 2019, initially supporting 14 cryptocurrencies. eToro followed up in April 2019 with a cryptocurrency trading service called eToroX that targets professional traders.
As claimed by a famous proverb, Timing is everything – eToro’s entry into the cryptocurrency market couldn’t have been timed better with bitcoin’s (BTC) steep rise over the last 18-months. With its support for cryptocurrencies, combined with an increase in amateur and day trading in cryptocurrency and regular shares through 2020 due to the COVID-19 pandemic and the shift to remote working, eToro has thrived.
The company added over five million new registered users in 2020 and generated gross revenues of $605 million, the latter up 147% over the previous year.
eToro’s growth momentum isn’t slowing into 2021 either. Having seen 192,000 new registrations per month in 2019 and 440,000 per month in 2020, eToro added 1.2 million new registered users in January this year alone. The trading numbers reflect similarly – in 2019, eToro was processing eight million trades a month, 27 million a month in 2020, and then processed 75 million transactions in January.
“We founded eToro with the vision of opening the global market for everyone to trade and invest in a simple and transparent way. Today, eToro is the world’s leading social investment network,” Yoni Assia, chief executive officer of eToro, announced in a statement. “We created a new category of wealth management – social investing – and we are dominating the market as evidenced by our rapid expansion.”
Coming into its entry into public markets via SPAC merger, eToro had previously raised $272.7 million in venture capital funding, according to data from Crunchbase. Notable investors include Bracket Capital, China Minsheng Financial Holdings, Korea Investment Partners, SBI Group, World Wide Invest, and Digital Currency Group.
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